Wall Street has ended lower, extending its losses in late afternoon trading as a raft of economic data failed to alter the expected course of aggressive tightening by the Federal Reserve amid growing warnings of global recession.
The sell-off gathered momentum toward the end of the session, with market leaders including Microsoft Corp, Apple Inc and Amazon.com Inc hitting the tech-laden Nasdaq hardest.
Interest rate-sensitive banks helped soften the blue-chip Dow's decline.
"It's been a difficult year and investors are wary," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
"Until something changes the tie's going to go the runner and that's been the bear."
That scale tipped further to the bear side after the World Bank and the International Monetary Fund (IMF) warned of an impending global economic slowdown.
A mixed bag of economic data, led by better than expected retail sales, cemented the likelihood of another 75 basis-point interest rate hike from the Fed at the conclusion of next week's monetary policy meeting as uncertainties simmered over where the US central bank will go from there.
"The question is what's going to happen in November?" said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"If the Fed really wants to handle it properly, it will be 50 basis-point drop in November, a 25 basis-point cut in December and then they'll reassess."
While the retail print surprised to the upside, declining jobless claims reaffirmed the labour market's strength, and a drop in import prices supported the past-peak inflation narrative.
But a surprise drop in industrial production and a contraction of Atlantic region manufacturing provided fodder for economic pessimists.
None of the data appeared to change the calculus regarding Fed expectations.
Financial markets have now fully priced in an interest rate increase of at least 75 basis points next Wednesday, with a one-in-five chance of a super-sized, 100-basis-point hike, according to CME's FedWatch tool.
US railways remained open after US President Joe Biden's administration helped broker a tentative deal with unions to avert a strike, thereby avoiding a rail shutdown which would add to supply-chain pressures at the core of hot inflation.
Shares of railway operators Union Pacific and Norfolk Southern outperformed the broader market.
Adobe Inc tumbled after the company said it would buy Figma in a deal valued at about $US20 billion ($A30 billion).
The S&P 500 lost 44.40 points, or 1.13 per cent, to end at 3,901.61 points, while the Nasdaq Composite lost 166.19 points, or 1.42 per cent, to 11,553.49 and the Dow Jones Industrial Average fell 173.24 points, or 0.56 per cent, to 30,961.85.